PA Budget

As work on the 2017-18 budget continues, a bipartisan group of state legislators have become more vocal in their support of a severance tax on natural gas drillers. In response, the Marcellus Shale Coalition is putting on the full-court press.

In its recent letter to Speaker Mike Turzai, the Marcellus Shale Coalition points, in paragraph three, to the effective tax rate (ETR) on production as a key indicator of whether Pennsylvania should enact a severance tax in addition to the per-well impact fee we already have.

As legislative leadership and Governor Wolf look to wrap up the revenue portion of the 2017-18 state budget, the remaining negotiations is at least focused on the right subject: finding adequate and sustainable long-term revenues. Unfortunately, rather than work for new recurring revenues, Republican Leadership continues on the irresponsible path it has taken for most of this decade.

Pennsylvania must brace itself for a substantial decrease in federal Medicaid payments that would devastate our state budget and cause massive losses in Medicaid coverage as the Senate moves to pass a version of the House’s American Health Care Act. Under the leadership of Pennsylvania’s own junior senator, Pat Toomey, that version of the bill has significantly deeper cuts to Medicaid than the House bill.

Last year at our budget summit, we said that Pennsylvania is at a crossroads and that there are two paths forward. We are still there. Pennsylvanians—and their government—are divided about which of two paths they believe our state government should follow.

One view is that the public sector—both the work of government and the work of non-profits that rely on state government funding—is essential to creating broadly shared prosperity in Pennsylvania. The other view downplays the positive role of government and public investments, and sees the taxes that pay for them as an impediment to economic growth.

Gov. Tom Wolf presented his 2017-18 State Budget Proposal on February 7, 2017. The Pennsylvania Budget and Policy Center will be posting analysis, infographics and related documents on this page as they become available. Check back often for the latest updates.

In his budget address, Governor Wolf observed that Pennsylvania faces a choice of two paths. Taking one path would require us to deal with the reality of our structural deficit and raise revenues to close it. It would enable government to continue to meet its responsibilities to educate our children, serve those who need our help, protect the environment and encourage economic growth. Taking the other path would require us to accept devastating cuts to education and health and human services.